Reinertsen says: "I believe that people in the Agile software space are doing a better job at using Lean in Product Development than companies that have forty years of experience with Lean Manufacturing, and that's because the Lean Manufacturing people have this toxic idea that variability is always bad and that it is feasible to eliminate variability. In highly repetitive manufacturing processes there's some truth to that, and in manufacturing processes you don't need to innovate. In Product Development you need to innovate in order to add value. As a result, if you try to drive out variability you drive out all of the innovation!"

Reinertsen's book is quite dense: a 600 page book compressed into just under 300 pages. The density makes Don's summary talks worthwhile: he intends to write a 150 page version for non-Engineers "one day".

Summary of Reinertsen's talk to the Limited WIP society

Melbourne, 11 December, 2012

Some highlights from Reinertsen's two day workshop in an hour, plus questions

Big idea #1: Economics

"Provide product developers with good decision support information to make economic decisions."

What you get: "An apolitical framework from which to make multivariate trade-offs". Enables effective decentralization of control.

The alternative: "Get into ideological debates."

The #1 thing to quantify: cost of delay (e.g. $ lost per month of delay of project delivery)

How accurate do you need cost of delay to be? Inter-rater reliability of individuals' intuition of cost-of-delay at the same organisation:

Average: 50 : 1 spread

Best: 10 : 1

Worst: 200 : 1

"Any analysis beats intuition."

Implementation requires the construction of a quantitative model: in questioning Reinertsen said he can build this from the implicit P&L in a typical project business case, and that it's a lot less flaky than the ROI model, but he didn't give an example or recipe.